form of the word as well as to the singular:

1.1                                “Affiliate” shall mean any corporation, firm, association, joint venture, partnership or other entity which directly or indirectly Owns, is Owned by or is under common Ownership with either Party. The terms “Owns”, “Owned” and “Ownership” for purpose of determining status as an Affiliate shall mean ownership of at least fifty percent (50%) of the voting equity or other ownership interest conferring on the entity who holds it the power directly or indirectly to control or direct the affairs of such corporation, firm, association, joint venture, partnership, or other entity (or such lesser percentage in a particular jurisdiction that provides such control).

1.2                                “Adverse Ruling” shall have the meaning set forth in Section 6.2

1.3                                “ADR” shall have the meaning set forth in Exhibit B hereto.

1.4                                “Compound” shall be a chemical entity that lowers amyloid beta 42 peptide without significantly affecting Notch processing. For clarification, the definition of “Compounds” excludes Neurogenetics’ muscarinic receptor agonist compounds, including, without limitation, NGX267 and NGX292.

1.5                                “Dispute” shall have the meaning set forth in Section 8.3.

1.6                                “Effective Date” shall mean the date first set forth above.

1.7                                “Eisai’s Counsel” shall mean Eisai’s designated outside counsel, who is identified in Exhibit C.

1.8                                “Eisai’s Proprietary Information” shall mean any and all scientific and technical information and data, know-how and concepts which have been developed prior to the Effective Date or hereafter developed during the term of this Agreement by or on behalf of Eisai.

1.9                                “Extension Term” shall have the meaning set forth in Section 6.1.

1.10                         “FTE” shall mean the equivalent of work performed during a twelve (12)-month period on a full time basis by a scientist or other professional (whether an employee or independent contractor of Neurogenetics) possessing skills and experience necessary for Neurogenetics to carry out the Project.

1.11                         “Indication of Interest” shall have the meaning set forth in Section 3.2(c).

1.12                         “Negotiation Period” shall have the meaning set forth in Section 3.2(d).

1.13                         “Neurogenetics’ Property” shall mean any and all intellectual property (including, without limitation, all patents, patent applications, trade secrets and know-how) claiming, disclosing or covering any Validated Compound resulting from the Project and any and all Neurogenetics’ Proprietary Information with respect to any such Validated Compound.

1.14                         “Neurogenetics’ Proprietary Information” shall mean any and all scientific and technical information and data, know-how and concepts which have been developed prior to the Effective Date by or on behalf of Neurogenetics in the course of its project for the discovery of Compounds in the field of treatment or prevention of Alzheimer’s disease in humans, or are hereafter developed during the term of this Agreement by or on behalf of Neurogenetics in the course of the Project.

1.15                         “Neutral” shall have the meaning set forth in Exhibit B hereto.

1.16                         “Party” and “Parties” shall mean Eisai or Neurogenetics or both, as applicable.

1.17                         “Project” shall mean the project for the discovery of Compounds in the field of treatment or prevention of Alzheimer’s disease in humans, which Neurogenetics is performing and will carry out during the Term, as specified in the Project Plan.

1.18                         “Project Plan” shall mean the plan attached as Exhibit A hereto and incorporated herein.

1.19                         “Recipient” shall have the meaning set forth in Section 7.1.

1.20                         “Response Period” shall have the meaning set forth in Section 3.2(f).

1.21                         “Term” shall have the meaning set forth in Section 6.1.

1.22                         “Term Sheet” shall have the meaning set forth in Section 3.2(f).

1.23                         “Validated Compound” shall mean (a) any Compound discovered or identified by or on behalf of Neurogenetics prior to the Effective Date or in the course of the Project, which is designated by Neurogenetics as validated in accordance with the Validation Criteria in effect at the time the applicable quarterly report detailing such Compound is submitted to Eisai’s Counsel where such designation is confirmed by Eisai pursuant to Section 3.2(a), and (b) hydrates, solvates, salts, stereoisomers, prodrugs and polymorphs of such Compound.

1.24                         “Validation Criteria” shall mean the biochemical, toxicological and/or pharmacological criteria for validating a Compound identified in the course of the Project that are attached hereto as Exhibit D and incorporated by reference herein, as they may be amended upon written agreement of the Parties.

ARTICLE 2

COLLABORATION AND GOVERNANCE

2.1                                Neurogenetics shall use all reasonable efforts to conduct the Project during the Term in accordance with the Project Plan. However, it is agreed and acknowledged that, so long as it conducts the Project in accordance with the Project Plan, Neurogenetics shall be solely responsible for conducting the Project, and shall, in its sole discretion, select the research tools and methods that are used in the course of the Project. Eisai shall not control the Project. Neurogenetics shall devote such personnel and other resources to the Project during each year of

the Term as is appropriate to perform or support the work to be conducted under the Project in accordance with the Project Plan.

2.2                                Neurogenetics acknowledges that Eisai has developed and possesses its own proprietary chemical entities resulting from its own project whose purpose is to discover lead compounds that selectively lower amyloid beta peptide without significantly affecting Notch processing and that Eisai will continue to develop its own chemical entities in an effort to obtain pharmaceutical compounds which will be suitable for clinical development in the field of Alzheimer’s disease. In this respect, the Parties agree to establish mutually acceptable procedures to prevent the disclosure of Eisai’s Proprietary Information to Neurogenetics and, except as provided herein, to prevent the disclosure of Neurogenetics’ Proprietary Information to Eisai.

ARTICLE 3

FIRST NEGOTIATION RIGHT AND RIGHT OF FIRST REFUSAL

3.1                                Neurogenetics hereby grants to Eisai, during the Term and the Extension Term, as applicable, the exclusive right to be the first to negotiate terms and conditions to license, collaborate, form alliances, joint ventures and/or partnerships or other similar business arrangements with respect to a Validated Compound and Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import in accordance with Section 3.2. Neurogenetics also grants to Eisai a right of first refusal on any Term Sheet (as defined below) in accordance with Section 3.2.

3.2                                The Parties agree and acknowledge that Eisai’s exclusive right, set forth in Section 3.1, to be the first to negotiate and Eisai’s right of first refusal on any Term Sheet shall be realized and implemented through the following procedures:

(a)                                   Neurogenetics shall submit to Eisai and Eisai’s Counsel a report promptly following the end of each calendar quarter during the Term, which provides true and accurate information regarding the following:  (i) a statement whether, as to each Compound referenced in the report, the Compound is believed by Neurogenetics to satisfy Validation Criteria, together with a detailed explanation of the performance and characteristics of the Compound as compared to each of the Validation Criteria; and (ii) a summary of research activities under the Project during the applicable period, provided that Neurogenetics shall not disclose to Eisai, but will disclose to Eisai’s Counsel, the identity and structure of each Compound referenced in the report. Upon receipt of the report, Eisai may ask questions regarding such Compounds and other matters referenced in the report directly or through Eisai’s Counsel to Neurogenetics, who shall respond in good faith to such questions promptly. In the event that Eisai does not designate as a Validated Compound a Compound which is referenced in the report, which Neurogenetics states it believes satisfies the Validation Criteria, and for which information relating to the Validation Criteria is provided in that report, within [***]) days after the date of such report or [***] days after receipt of Neurogenetics’ good faith responses to such questions asked by Eisai, then such Compound will be deemed not to be a Validated Compound. If Eisai reasonably believes that additional experiments are required before it can determine whether a Compound is a Validated Compound, Eisai informs Neurogenetics of such additional experiments and then Neurogenetics shall perform the experiments in a timely manner. The results of any such additional experiments on such Compound will be described in a report provided in accordance with this Section 3.2(a). The contents of reports provided to Eisai and Eisai’s Counsel hereunder shall be treated by them as confidential information of Neurogenetics, within the meaning of and subject to the terms and obligations of Article 7 hereof and the agreement between Eisai’s Counsel and

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Neurogenetics, which is attached hereto as Exhibit E, respectively. Except as provided in Section 3.2(e), Neurogenetics will not disclose to third parties any information described in the quarterly report or summaries without prior written consent of Eisai during the Term, except that (i) Neurogenetics may disclose information described in the quarterly report or summaries to potential third party financial investors in Neurogenetics (provided that Neurogenetics shall not disclose chemical structure of the Compounds to any such third party financial investor and any such third party financial investor agrees to maintain the confidentiality of any such information of Neurogenetics provided to such third party financial investor by Neurogenetics), and (ii) Neurogenetics may issue press releases and make scientific presentations and publications in the ordinary course of its business that generally describe the status of its research and development activities, provided that such press releases or scientific presentations do not disclose any Validated Compounds to which Eisai continues to have rights under this Section 3.2 or any Compounds discovered or identified in the course of the Project that Eisai has not completed yet their review to determine whether or not they are Validated Compounds. It is agreed and acknowledged that the particular compounds disclosed by Neurogenetics to Eisai’s Counsel on February 14, 2005 shall be governed by this Agreement.

(b)                                  Neurogenetics shall allow Eisai’s Counsel or their agents to visit research facilities of Neurogenetics during the Term and the Extension Term, as applicable, with reasonable prior notice and at reasonable times and for a reasonable length of stay in order to enable Eisai’s Counsel or their agent to understand the status of the Project. Eisai’s Counsel or their agents shall be subject to Neurogenetics’ standard policies regarding visitors to its facilities and shall be obligated to hold any confidential information of Neurogenetics in confidence in accordance with the letter between Eisai’s Counsel and Neurogenetics, and neither Eisai nor

Eisai’s Counsel or their agents shall use any such confidential information of Neurogenetics for any purpose other than as contemplated by this Agreement in accordance with the provisions of Article 7. In addition, Neurogenetics and Eisai or Eisai’s Counsel, as applicable, will have regular communication by video, telephone and e-mail as reasonably necessary during the Term regarding the status of the Project.

(c)                                   During the Term and the Extension Term, as applicable, Eisai may express its interest in negotiating the terms and conditions of a license, collaboration, alliance, joint venture, partnership or other similar business arrangement with respect to one (1) or more specific Validated Compounds within the Neurogenetics’ Property by providing written notice to Neurogenetics specifying the applicable Validated Compounds of interest (an “Indication of Interest”). Eisai must provide an Indication of Interest with respect to a Validated Compound within [***] days after the date that Eisai designates such Validated Compound. If Eisai does not provide an Indication of Interest with respect to a Validated Compound within such period, then the right of first negotiation with respect to such Validated Compound shall expire at the end of such period, and Eisai shall have no further rights with respect to such Validated Compound.

(d)                                  For a period of [***] days following the date of an Indication of Interest (the “Negotiation Period”), the Parties shall negotiate in good faith regarding a proposal for a license, collaboration, alliance, joint venture, partnership or other similar business arrangement with respect to the Validated Compound specified in such Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import. The Negotiation Period may be extended upon written mutual agreement of the Parties for an additional [***] days, and such additional [***]

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day period shall be included in the defined term “Negotiation Period.”  The terms and subject matter of such negotiations shall be treated by the Parties as confidential information of both Parties, within the meaning of, and subject to the terms and obligations of, Article 7 of this Agreement. During the Negotiation Period, Neurogenetics will provide to Eisai current information, and will respond to Eisai’s reasonable inquiries, regarding any Validated Compound as to which Eisai has provided an Indication of Interest.

(e)                                   In the event that, by the end of such Negotiation Period, the Parties reach an agreement with respect to the terms and conditions of a license, collaboration, alliance, joint venture, partnership, or other similar business arrangement with respect to the Validated Compound specified in the applicable Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import, then the Parties will enter into a definitive agreement reflecting the terms and conditions mutually agreed to by the Parties. In the event that, by the end of such Negotiation Period, the Parties do not reach an agreement with respect to the terms and conditions of a license, collaboration, alliance, joint venture, partnership or other business arrangement with respect to the Validated Compound specified in such Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import, then, except as set forth in Section 3.2(f) with respect to the right of first refusal, Eisai shall have no rights with respect to the Validated Compound specified in such Indication of Interest or any Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import, and Neurogenetics shall be free to discuss and, subject to compliance with Section 3.2(f), as applicable, enter into with a third party the terms and conditions of a license, collaboration,

alliance, joint venture, partnership or other similar business arrangement with respect to the Validated Compound specified in such Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import, and to disclose such Neurogenetics’ Property, including, without limitation, information described in the relevant quarterly report and summaries as necessary to facilitate such actions.

(f)                                     For a period of [***] months following the end of such Negotiation Period, Neurogenetics may not enter into an agreement with respect to the terms and conditions of a license, collaboration, alliance, joint venture, partnership, transfer or other similar business arrangement with respect to the Validated Compound that was the subject of an Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import (for clarification, excluding any Proposed Transaction, which shall be addressed in Section 3.2(i)) unless (i) Neurogenetics first provides to Eisai the Term Sheet (as defined below) for such agreement, and (ii) Eisai does not make a proposal to Neurogenetics in writing that is equivalent or superior to the Term Sheet within the Response Period (as defined below). As used herein, “Term Sheet” means the term sheet (or if there is no term sheet, a written summary of the terms) agreed to by Neurogenetics and a third party in connection with negotiations with such third party, which describes the material terms and conditions of a definitive agreement for a transaction described above regarding specific Neurogenetics’ Property relating to a Validated Compound that was previously identified in such Indication of Interest. As used herein, “Response Period” means the [***] day period immediately following the date that Neurogenetics first provided the Term Sheet to Eisai; provided that, if such Term Sheet is amended or modified in any material respect

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prior to the end of such [***] day period, such Response Period shall be extended, if necessary, so that such Response Period ends no earlier than [***] business days after the date that Neurogenetics provided the Term Sheet as so amended or modified to Eisai. If the Term Sheet is amended or modified in any material respect prior to the end of the Response Period, Neurogenetics shall provide to Eisai the Term Sheet as amended or modified, and references to such Term Sheet in this Section 3.2(f) shall thereafter refer to the Term Sheet as amended or modified. During the Response Period, Neurogenetics will provide to Eisai current information, and will respond to Eisai’s inquiries, regarding any Validated Compound as to which is subject of the Term Sheet. For avoidance of doubt, in the event that Eisai makes a proposal to Neurogenetics in writing that is equivalent or more favorable to Neurogenetics than the Term Sheet within the Response Period, Eisai and Neurogenetics shall enter into good faith negotiations for a definitive agreement with respect to that proposal. In that event, Neurogenetics shall not enter into discussions about a definitive agreement with the third party regarding a transaction described in this Section 3.2(f) for a period of [***] days after such proposal is provided by Eisai to Neurogenetics. If Neurogenetics consummates such a transaction with a third party in compliance with this Section 3.2(f), then Eisai shall have no rights with respect to the Validated Compound and the Neurogenetics’ Property relating to the Validated Compound specified in such Indication of Interest.

(g)                                  At the end of the Term or the Extension Term, as applicable, Eisai shall have no rights with respect to any Neurogenetics’ Property, except (i) rights granted under any license, collaboration, alliance, joint venture, partnership or other similar business arrangement with respect to the Validated Compound specified in an Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its

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manufacture, use, sale, offer for sale or import entered into by the Parties in accordance with the procedures described in this Section 3.2, and (ii) solely during the applicable Negotiation Period, the right of first negotiation granted under this Section 3.2, and, if applicable, solely for the [***] month period following the end of such Negotiation Period, the right of first refusal granted under this Section 3.2, with respect to the Validated Compound specified in any Indication of Interest dated prior to the end of the Term or the Extension Term, as applicable, and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import.

(h)                                  For clarification, the Parties acknowledge and agree that the right of first negotiation in this Section 3.2 shall apply only to the Validated Compound specified in an Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, , sale, offer for sale or import, and the right of first refusal granted in this Section 3.2 shall apply only to a transaction described in Section 3.2(f) with respect to a Validated Compound specified in an Indication of Interest and the Neurogenetics’ Property claiming, disclosing or covering such Validated Compound or its manufacture, use, sale, offer for sale or import, and shall not otherwise apply to any other intellectual property of Neurogenetics.

(i)                                      If, during the Term or the Extension Term, as applicable, the Board of Directors of Neurogenetics determines to consider the sale of all of its business, or any portion of its business that includes the Neurogenetics Property, through a merger, sale of assets or similar transaction (a “Proposed Transaction”), then before Neurogenetics agrees to the principal terms of a Proposed Transaction with any third party, Neurogenetics will first advise Eisai in writing that Neurogenetics is considering a Proposed Transaction. If Eisai does not provide written

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notice to Neurogenetics within [***] days after the date of the written notice provided by Neurogenetics to Eisai regarding a Proposed Transaction that Eisai is interested in discussing a Proposed Transaction between the Parties, then Neurogenetics may proceed with a Proposed Transaction with any third party without further obligation to Eisai under this Section 3.2(i). If Eisai provides written notice to Neurogenetics within [***] days after the date of the written notice provided by Neurogenetics to Eisai regarding a Proposed Transaction that Eisai is interested in discussing a Proposed Transaction between the Parties, then, for a period of [***] days following the date of such written notice from Eisai (the “Discussion Period”), the Parties shall negotiate in good faith regarding a Proposed Transaction between Neurogenetics and Eisai. The Discussion Period may be extended upon written mutual agreement of the Parties for an additional[***] days, and such additional [***] day period shall be included in the defined term “Discussion Period.”  The terms and subject matter of such negotiations shall be treated by the Parties as confidential information of both Parties, within the meaning of, and subject to the terms and obligations of, Article 7 of this Agreement. In the event that, by the end of such Discussion